Fulfilling Promises

A little more than a year after assuming General Cigar Company’s presidency, Regis Broersma is steering the company toward a bright future

By Stephen A. Ross

The 2016 Tobacconists’ Association of America (TAA) convention was something of a coming out party for Regis Broersma, the new president of General Cigar Company. Assuming the company’s presidency on Feb. 1, 2016, Broersma had kept his travel agent busy scheduling numerous trips across the United States to meet retailers and obtain a crash-course reintroduction to the American cigar market and General Cigar Company’s place in it. Much of the feedback Broersma received was expected, and some of it was a little surprising, yet amid his travels a few themes soon emerged on how General Cigar Company could accelerate growth. So when Broersma was given the opportunity to speak to most of the nation’s top premium tobacco dealers at the TAA convention, he came prepared.

“I made three promises to the TAA members last year,” the 40-year-old Broersma recalls. “The first was that General Cigar Company would listen and act upon its retailers’ concerns and needs. The second was that we would be humble and serve our retailers. The third was that we would surprise them and their consumers with cigars that would excite them and protect our brick-and-mortar retailers.”

In the months since, Broersma and the rest of the General Cigar Company team have made good on his pledges, and their hard work is at last bearing fruit. For many retailers, their initial skepticism has been replaced by faith—and orders for the company’s products—and for the first time in a decade, General Cigar Company is growing its business with brick-and-mortar retailers again.

“The last year has been focused on doing nothing but delivering on what we promised at the 2016 TAA convention,” Broersma says. “The ship has turned around, and it’s going in the right direction. We are ahead of schedule, so that is good. I know retailers like what we are doing, and the feedback at the TAA this year and when I travel around the country is really positive. Are we where we want to be yet? No, but we’re on the way.”

The ship has turned around, and it’s going in the right direction. We are ahead of schedule, so that is good. I know retailers like what we are doing, and the feedback at the TAA this year and when I travel around the country is really positive. Are we where we want to be yet? No, but we’re on the way.

Like any journey, Broersma’s leadership of General Cigar Company has had a few unexpected twists and turns and the occasional detour, but the overall direction has been positive since the Dutch national became president. Assuming leadership of General Cigar Company beckoned a return to the United States for Broersma, who previously worked in the U.S. for Scandinavian Tobacco Group in 2009 before embarking on positions of increasing authority and responsibility throughout Europe. Armed with his experiences in the U.S. and several other countries, Broersma recognized that organizational morale is key to sparking market success. When he arrived at General Cigar Company’s Richmond, Virginia, headquarters on Feb. 1, 2016, he immediately recognized that the organization needed a boost.

Broersma remembers, “There were a few people that were in the wrong positions, but overall the passion and the will to be successful was already there. They just needed to be encouraged to have fun again. In the old atmosphere people were afraid to make progress, and they did the same thing over and over again for the last 10 years. That’s not good enough. I mentioned to all of them that I will spend more time with them than with my family and friends, so we better make it fun. If a person can smile when they come into the office, enjoys what he or she does, and feels empowered to do his or her job as he or she sees fit, great things happen. They will push the envelope and risk a little bit.”

Armed with Broersma’s full blessings and a renewed sense of empowerment, General Cigar Company’s brand managers and sales team have felt a new sense of freedom. Successes are, of course, great, but failure can be a profitable learning experience as well.

“I want the team to try new things,” Broersma says. “That’s how we try to push it a little bit. Sometimes it goes well and sometimes it doesn’t, but you won’t know unless you try.”

Energized by Broersma’s encouragement, which favors experimentation and being bold, General Cigar Company created a vast array of new products since last year’s IPCPR show, many of which offer keystone margins to retailers. The company has also added muscle to its sales and marketing force to offer better service to its customers.

“Keystone margin is a huge step for a company like General Cigar,” Broersma explains. “That is a very costly exercise because the brands are very big. We are also pushing to get more people on the street talking about our brands—more salespeople and brand managers—everything to service the brick-and-mortar community more. For the last 10 years we had been cutting back. We’ve turned that around and are investing a lot of money in marketing and sales.”

Last year, General Cigar Company introduced around 120 new cigars, including Macanudo Inspirado Orange, a cigar that not only expands the traditional brand’s flavor and strength profile but is also available solely through brick-and-mortar retailers. There was also the release of a new Punch Gran Puro and the Partagas Heritage, in addition to two new variations in Torano’s Vault line, plus Foundry’s Temple Hall.

“The whole refresh of Macanudo has been a big shift for us,” Broersma continues. “It takes a lot of discussion to make a shift like that for such a big brand. Inspirado is one of the best launches we have ever done. Inspirado Orange has been successful in brick-and-mortar stores, and rotations are high. It’s taking Macanudo from the mild taste profile and bringing to it a more Cuban-esque profile and branding the line to be a bit more modern. Macanudo has been up almost double digits, and for a brand with the market like Macanudo, that is a big jump.”

Another brand that’s seen a renewal in the past year has been Cohiba. Historically, Cohiba has been one of General Cigar Company’s more expensive offerings, with price points beginning at more than $10 before state and local taxes. The addition of Cohiba Nicaragua gave the brand more accessibility. The introduction of Cohiba Blue, with price points of less than $10, introduced the brand to even more people who might not have ever considered purchasing a Cohiba because of the price point.

“Cohiba’s price points have been a little bit inaccessible for some consumers, and that’s why Cohiba Blue has been added,” Broersma explains. “We’re introducing the Cohiba brand to more consumers who, maybe later on, will upgrade to a higher price point which will give the retailer a larger margin.”

That’s how partnerships are built in General Cigar Company under Broersma’s leadership. The company is focused more than ever on fostering its relationships with its customers and building on its reputation for innovation, despite the U.S. Food and Drug Administration’s (FDA) intention to make it very difficult for cigars released after 2007 to remain on
the market.

“I come from Europe, where we had the [revised Tobacco Products Directive] regulation, which restricted the tobacco industry there as well,” Broersma says. “One of the big lessons that we got from that one was that we focused so much on being compliant with legislation that we completely ignored innovation for a couple of years. That bit us in the end because the competition had moved on. So when I came here and the FDA legislation came out, I made sure that we would be compliant but at the same time we would continue innovation and keep surprising the market. With General Cigar, we have one of the biggest blend books available, and most were in-market before the predicate date of 2007. It’s risky, but with the resources that General Cigar Company has, the risk is mitigated. We have a library of amazing blends, and we strongly believe that if we stop innovating then the industry will stabilize and then decline. So, we need to push that curiosity in the industry for its own good.”

Broersma expects that General Cigar Company will introduce approximately 80 or so new products throughout 2017. These will mostly include new sizes in existing brands, limited editions and a few brand introductions. The focus, as always under Broersma’s leadership, will be to roll out and support products that strengthen the company’s partnerships with its brick-and-mortar retailers.

“We are refocusing so that we can establish brands with long-term success,” Broersma says. “You will see that this year at the [IPCPR] show with follow-ups on things that we introduced last year. One of the key selling points is that we have all the boots on the street—sales and marketing support—that when we go into the store monthly we can see how the products are selling out and that we can support the retailers in that regard. We don’t want to just sell and forget about it—that’s not a partnership. Our sales and marketing team is empowered to do the right things that will help our retailers achieve success. If they go into a store and see a problem, they will fix it in their own way. It’s important to be flexible and find the right solutions for our customers.”

With the spirit of flexibility in mind, Broersma is unwilling yet to discuss in detail what new products retailers attending the 2017 IPCPR show can expect to see. He just encourages everyone to stop by the General Cigar Company booth in July and alluded to something big coming from Macanudo.

“I wish I could share all the plans that we have, but then all the surprises would be gone,” he says. “We will bring surprises at the show that I know our customers will love.”

Broersma should know. He’s kept up a torrid pace traveling the country to visit retailers at their shops. He’s learned, and is continuing to learn, what General Cigar Company’s retailers need most to succeed in the tumultuous world of the premium cigar industry. He’s formulated a plan based on his conversations with retailers, and he’s energized his co-workers to follow through on the plan—to fulfill the promises Broersma made in February 2016 and continues to make.

“My continued message is that we are listening to our retailers, and I think we have showed [that] through our actions this last year,” Broersma concludes. “The brick-and-mortar segment is where I want us to win because that is where our new consumers come in. We need the brick-and-mortar customers to partner with us. We must drive that. I say to all the retailers I visit to tell me what’s on their mind. I’m Dutch, so I am very direct and I can take a lot of punches, so bring them on. Tell me what you think, and we’ll go from there.”